Article via Bill Macklem of Dominion Macklem Mortgages
November 17th, 2017
The words "good news" and "FICOM" are not usually in the same sentence, but there is good news from FICOM today.
Acting Superintendent of FICOM, Frank Chong, announced that they will not be putting OSFI like stress tests on the credit unions in BC - at least for now. There was some concern that credit unions - who are not regulated by OSFI - would have similar stress test rules put on them by FICOM. Thankfully, that is not the case.
This should mean more opportunities to have deals completed by credit unions starting in 2018 and allow hard working, credit worthy Canadians to secure a mortgage without having to qualify at the two point stress test.
Here is the complete statement from Mr. Chong and FICOM:
FICOM has reviewed the new requirements from the federal bank regulator (OSFI) regarding requirements for residential mortgage qualification.
These changes come into effect in January 2018 for federally regulated financial institutions but will not apply to provincially-regulated institutions like credit unions now regulated by FICOM.
Because some borrowers will not be able to qualify for mortgages with banks, they may migrate to credit unions or private lenders where qualifying is less stringent. FICOM has a residential mortgage guideline in place for credit unions and regularly reviews that directive to determine if credit unions are managing risks effectively.
In the coming months, we will be consulting with credit unions and monitoring developments in residential mortgage lending to protect the interests of consumers and credit union members.
We will continue to assess the situation, but no changes are contemplated in provincial requirements at this time.
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